Rent Rolls: You Are Buying a Rent Roll – What Should You Think About?
The main thing that Purchasers of rent rolls think about is the Multiplier. The reality is that the Multiplier comes out of many different factors.
Some of the factors that need to be considered in determining the Multiplier are as follows:
Most estate agents are good negotiators, but you would need to think long and hard whether you would be the best persons to negotiate the purchase of a rent roll and in particular multiplier. This task may be better left to brokers who specialise in this field or solicitors or accountants who have some knowledge of rent rolls
Where are the properties?
What is the condition of the properties?
Are there owners with multiple properties?
Are there any usual connections between the Vendor Agent and the Landlords?
What staff will I need and will I need any of the Vendors Staff – Can I get them?
What are the costs that I will incur in running the rent roll?
Am I getting rid of the competitors?
How long is the retention period?
What restraints can I get?
In my view all of these and a few others feed into the appropriate multiplier.
Over the next few weeks, I will expand on these topics and a few others that are relevant when buying a rent roll.
If you require any help in the interim in purchasing or selling a rent roll, please do not hesitate to contact John Turnbull of our Commercial Property team on 8540 0280.
Author: John Turnbull